Leasehold reform in the UK
Written 13 April 2022, now outdated.
The UK government has proposed two rounds of leasehold reform:
- banning new ground rents
- reforming commonhold, enfranchisement and the Right To Manage
The first of these is already the law; the second will be in the Queen's Speech in a few weeks. In parallel, there is controversial legislation before Parliament concerning building safety.
Those are the reforms which are actually going to happen, and for which there is a real timetable; these reforms are basically inevitable. On the other hand, there is a set of initiatives which the government has committed to without giving a timetable:
- regulation of property agents
- giving freeholders on private estates the inadequate rights of leaseholders
- banning the sale of leasehold houses
- reforming forfeiture of freehold houses
Some of these matters date back as far as 2017.
Thirdly, there are necessary or desirable reforms which the government has not committed to at all; some are supported by the Leasehold Knowledge Partnership and other worthy bodies, but not all:
- making commonhold mandatory for new-built blocks of flats
- making commonhold available to all other blocks of flats
- reform of service charges
- banning insurance commissions and related abuses
- providing private estate freeholders with the option to use commonhold or RTM for common parts
- regulation of housing associations
and many others.
There is a growing deficit: the market is changing more quickly than the government can reform, and there is huge opposition from the donor class and the property industry.
There is little sense in government that it is losing control of the situation, with hundreds of thousands of new abusive tenures created annually due to the mass housebuilding programme. Nor is there a understanding that everyone who wants to own a home, but didn't enter the market before about 2010 is exposed to vicious monopolists, with no means of redress legally or politically, and a growing awareness of the abuses. The situation is not sustainable, and it is dangerous for a (largely middle-income) one-sixteenth of the population to become utterly disaffected with the legal and political system.
Something has to give.